If midsize businesses have the ability to store their funds offshore, why can’t they also store their data there as well? Such is the thinking of a small handful of service providers who are offering American companies the option of an offshore cloud. These data centers are located in remote places like the Channel Islands or Cayman Islands.

According to GigaOM, companies like Calligo have leased servers on these islands in order to provide a private cloud for companies looking to keep their data outside American borders. They aim to compete with the private cloud offerings of companies like Amazon, by providing Platform-as-a-service (PaaS) and Software-as-a-service (SaaS) virtual desktop programming and disaster recovery.

While offshore clouds may be enticing to midsize businesses that want to save on cost while avoiding United States copyright laws and taxes, they could prove to be more of a headache than they are worth–especially for IT. Cloud service providers located outside of United States jurisdiction have different privacy and data protection laws. Don’t assume these laws are in compliance with U.S. standards; oftentimes they are not. It’s important to find out what they are, to ensure that your data is fully protected. Know that spreading your data between several clouds guarantees a legal juggling act and quite possibly a limit to how much data you can access across the board at one time. Should your midsize business encounter any legal ramifications, it may be subject to being tried in a local court rather than one located in the United States.

Remote location also means latency issues. GigaOM warns that moving workloads becomes a hassle unless customers have either redundant or synced data stored in the places where they want to move said jobs. This seems like a lot of extra work for IT, considering there are onshore options that don’t encounter this issue at all.

Businesses are also taking a big risk with who their neighbours are in offshore clouds. While many enterprises that choose this option are storing legitimate, legal data, there are also those that aren’t. Should your service provider get busted for hosting illegal data, it could get shut down, and in the worst-case scenario, your data could be subpoenaed as well. If this were to happen, you could lose access to your data, crippling productivity.

With a whole host of downsides to consider, it’s imperative that you read the fine print before signing up for a cloud service provider located offshore. This is one contract you definitely want to urge your business’s legal department to go through with a fine-tooth comb. While a remote island paradise may be great for a vacation, you don’t want it to end up being the downfall of your data.

This post was written by Megan Mostyn-Brown* as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.

For more on this story go to:

midsizeinsider.com/en-us/article/is-an-offshore-cloud-a-wise-choice

*Megan Mostyn-Brown

Skyword Freelance Writer

Megan is a freelance writer who splits her time between New York and Los Angeles. She’s written articles on everything from technology to home decorating.